DNA325 leading IT recruitment agency in Ukraine specializing in recruiting IT talents across Eastern Europe has recently completed salary review analysis among Java Developers, Node JS Developers, AQA, Python Developers, and DevOps from four countries, Ukraine, Belarus, Armenia, Georgia. Thousands of developers of all levels from Junior to Senior participated in the research.
The aim was to show the market of Eastern Europe from within providing vital information regarding the current salaries and getting to know the answers to the most interesting questions. The company has gathered answers for the most commonly asked questions by Western investors. These include salary level, English level, an average time of work in one company, and others.
There were 5 thousand responders who participated in the research. So, let’s see what the results are.
What Is the Average Salary of Software Developers in Eastern Europe?
The first part of the research is dedicated to the average amount that developers are getting in these countries. The level of the wages paid in the countries depends on many factors. The economic and political situation, the number of offices opened by the world-famous IT companies and corporations. Also, it is worth considering how the local government is involved in the development of the IT sphere in the country, how many start-ups are present in the region, how they developed.
The following diagram will show the differences in salaries for Senior Developers from Ukraine, Belarus, Armenia, and Georgia. Since Senior developers are in great demand for the market let’s first see the data regarding their salaries.
According to the survey, salaries in Ukraine are higher than compared of neighboring countries, but this is due to the significant presence of American and European IT companies in the country. Let’s take a closer look at the Ukrainian IT industry.
Research Results of Ukraine
Ukraine is located in Eastern Europe and is considered a geographical center of Europe. Time zone UTC+2 and in the summer UTC+3. The current population of Ukraine is 41,319,838 as of 2021. The rapid development of the IT industry in the country significantly improved its position in the world.
In 2015 there were about 89,000 engineers while in 2021 raised to 250,000 with more than 4,000 global companies who opened offices in Ukraine. After growing by 30% in 2019, the IT sector overcame the devastating effects of the pandemic and grew by another 35% in 2021, for the first time in history exporting services worth more than 9 billion US dollars.
This is thanks to the following local and international companies that are present in the Ukrainian market: GitLab, SoftServe, Revolut, Grammarly, Very Good Security, Preply, Reface, and others. It is often said that Ukraine is located between East and West. Indeed, Ukrainian culture is a bright combination of cultures of different peoples who have lived and still live in Ukraine. This is what makes it so interesting.
So, what’s going on with the salaries of IT professionals in Ukraine? Let’s see the results.
These are the results from Ukraine, what about the rest, is it the same? Let’s find out about Belarus.
Research Results of Belarus
The Republic of Belarus is another country in Eastern Europe, neighboring Ukraine. Time zone UTC +3 and ISO code BY. The current population of the country is 9,349,645 as of 2021. It is smaller in territory and population but still has something to offer for the IT development in the region.
The IT sector is developing dynamically in Belarus. A number of IT companies with a global name were founded by Belarusian entrepreneurs. Here we have EPAM, Wargaming.net (World of Tanks is one of the five most profitable MMO games in the world), and such amazing start-ups like Loоna, Knomary, Vochi, Salo which have attracted tens of millions of dollars on investment over the past couple of years.
Besides that, Belarus has some world-famous companies like Viber, MSQRD, MAPS.ME, Flo, and many others. From 2005 to 2020, the export of IT services and products grew up 30 times. These are the reasons why this country was included in the research. The responders of the three main levels Junior, Middle, and Senior were asked the same questions, so let’s see the results.
Research Results of Armenia
Armenia is located to the east of Ukraine, its time zone is GMT + 4, and the population is about 3 million people. It’s a small country but with great possibilities. The main reasons for Armenia’s attractiveness are the development of the technological sector. Decent wages with low living costs, comfortable working conditions, and incredibly beautiful nature. It is these points that appear in the explanations of the majority of IT specialists who have immigrated to Armenia over the past years. Despite its relatively short technological history it has already created many interesting and quite perspective start-ups, that are worth attention. Here are just a few of them:
- PicsArt – is a media-editing application that is adapted to more than 30 languages. Currently, it is already surpassed over 600 million downloads and attracted $45 million of investments.
- SoloLearn – is a social mobile platform with over 45 million users all over the world. It is the largest mobile social platform for coders around the globe to consume, create, and share programming content. As to the investments, it has already attracted $6.9 million.
- Vineti – is a MedTech startup. It has already attracted $47.3 million, and its headquarters is in San Francisco. Vineti has patented the Personalized Therapy Management (PTM) platform, which ensures regulatory compliance and patient safety during cell and gene therapy and cancer treatment.
- DISQO – is created to help businesses and marketing agencies deal with the analysis of their customers’ behavior. Actively involved auditory is more than 10 million people and the company has already attracted $16.5 million.
- Krisp – the start-up was founded in 2017. They developed a special noise suppression technology. Krisp software is available for installation on laptops and desktops with Windows and Mac operating systems. The start-up has already attracted $17,5 million and successfully partnered with Discord messenger and Sitel.
Apart from having a rich pool of local start-ups the country can also boast that such giants as Cisco, EPAM, Oracle, Deloitte, DataArt, TeamViewer have already opened their offices there. Armenia also has a number of other advantages among them are strong technicians and affiliates of American companies. A small but active community of venture capitalists who are ready to support projects at an early stage.
Now let’s move to the last but not less interesting country Georgia.
Research Results of Georgia
Georgia is considered an Eastern neighbor of Ukraine. Its population 3,729,500 as of 2015. The time zone is UTC+4. Georgia is considered one of the most convenient countries on the planet for doing business. According to Doing Business, the country occupies the 7th position and the 2-nd place in the category “Starting Business”. The tax policies made Georgia so attractive.
The tax policies for doing business in Georgia are really very attractive, a company with international status, pays only Profit Tax – 5% after distribution of profits (if the income has been reinvested or you’d decided to keep it on the company’s account, then your tax will be 0%).
A foreigner can work as an entrepreneur in Georgia. Tax – 1% if the individual works for export and his annual income do not exceed 500 thousand lari (approximately $158 thousand).
As to the start-ups and IT sphere, it is rapidly developing in the country.
Shift Technologies – Online p2p marketplace for buying and selling used cars. The startup was launched in the USA and has already raised $110 million. The service promises to the buyers to deliver the car of their choice for a test drive to their settlements. It guarantees that all the cars presented on its resource undergo a strict selection according to their technical condition.
TTM Group – Startup Total Traffic Management Group (TTM Group) creates innovative equipment for limiting the speed limit of vehicles on highways. The project received $35,000 from the Georgian Agency for Innovation and Technology and the World Bank.
Optio.ai is a fintech startup that acts as a personal financial assistant to help you manage your budget. It connects to bank accounts and uses artificial intelligence to analyze income and expenses, as well as provide recommendations on how to optimize costs. In 2016, Optio won the Startup Georgia competition and received funding in the amount of 100,000 lari (approximately $32,414), after which the project went for acceleration to American Techstars.
The world-leading giants like EPAM, Exadel, SOFTSWISS, DataArt, FLAT ROCK TECHNOLOGY, FlashGrid Inc, Exactpro Systems Limited, Amindsolutions, have opened their offices in the country.
Let’s see the results provided by Georgian professionals.
In general, the country shows a positive growing tendency, yes there might not be so many start-ups like in Ukraine or Armenia, though business and laws contribute to the positive dynamics of the IT development industry in the country.
To sum up, all 4 countries are showing decent salaries amounts for the IT professionals. As we can see Ukraine is the leader in almost all of the positions. This is due to a few main factors like location, the number of international companies available in the market, local start-ups, and the level of English of IT talents. As far as Ukraine is in the top position let’s see what’s is beneficial in IT recruitment in this country?
Why Hiring IT Team in Ukraine is Beneficial?
IT professionals from Ukraine are considered the most valuable asset in the market. Actually, it’s true, as the country invests and fosters thousands of highly qualified technical individuals annually. Ukrainian IT market showing constant growth and should reach the value of US$18.4 billion by 2025. Such exponential development is due to a vast number of IT experts, the number is close to 250,000 individuals. Most of them have a proper technical and educational background. The developers and other professionals from Ukraine related to the IT industry are considered among the top 5 strongest experts in the world. So, it makes clear sense why top IT giants are striving to work with these people.
Let’s not also forget about the background. What makes Ukrainian talents so special? The answer lies in a few main directions, culture, education, market.
Culture. Ukraine is actually a geographical center of Europe. Such a position allows having a connection with many European countries. For example, by getting a plane from Lviv which is one of the biggest IT Outsourcing cities in the country, you will reach Berlin or Paris in just 2-3 hours. The location of the country makes Ukrainian professionals have the same mindset as their European colleagues, so they follow the same way. In addition, there are no big differences in business operating hours between Ukraine and the rest of Europe.
Education. Ukraine is popular with its educational system, number of universities, and number of international students enrolled in different programs. The main IT hubs of the country which are Kyiv, Lviv, Odesa, Kharkiv, and Dnipro have a few universities each. Plus, dozens of special education courses and IT schools for people with different levels of knowledge. The number of IT specialists who graduated from Ukrainian universities is constantly growing from year to year. Every year the demand for new IT specialists in Ukraine is 30-50 thousand people. In turn, higher education institutions graduate an average of 16.2 thousand bachelors in IT specialties each year. Colleges and technical schools train an average of 6.3 thousand junior specialists a year, and this number is growing every year. However, without further education, junior specialists will be insufficiently involved in the labor market of the IT industry, so they continue their studies in the university program. The number of bachelor’s degree graduates in the IT-sphere in Ukrainian universities will increase significantly in the coming years. In 2024, more than 20,000 people will receive a bachelor’s degree in IT, which is 23% more than in 2020.
The most prestigious Ukrainian universities are the following:
- V. N. Karazin Kharkiv National University. The highest-ranked university in Ukraine, established in 1804.
- Taras Schevchenko National University of Kyiv. Often considered as country’s most prestigious institution.
- National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute”. Has two campuses, Kyiv and Slavutych. The institute is popular with those who choose engineering and science.
The knowledge level of Ukrainian IT graduates is high. This opens the doors for international companies to enter the market and also, start cooperation with universities, to look for fresh graduates and invest in their growth, which will be beneficial for the business. This is actually happening, as now many different IT companies from abroad cooperate with Ukrainian universities.
Market. The IT business in Ukraine takes a significant part of the economy. The government has special rules and regulations regarding it. The tax percentage is relatively low. It allows many local companies to expand their business and foreign representatives to enter the market with minimal bureaucracy. Apart from that, the country has a lot of talented individuals who create their start-ups by providing lifesaving technologies.
Among the most prominent representatives, you may already heard of such companies as Grammarly and GitLab. Those were small Ukrainian start-ups first, but now they have millions of people using these services and their market value has reached millions and even billions of dollars. As to the freshly created ideas the Ukrainian government created the Ukrainian Foundation which grants money to the most bright and useful ideas.
In general, IT recruiting in Ukraine is the right way for getting highly skilled professionals and operating the business. There are two most used business models that can be successfully applied in the market, outsource and offshore development centers. Their main peculiarities will be described further in the next chapter.
Offshore Development Center vs Software Development Outsourcing
Offshoring is the movement of a business process done inside one company (an ODC is a department or an extended team) but in different countries. The remote software development team is most often aimed at getting an additional workforce but at reduced costs.
Offshoring is actually applied for engaging specialists abroad. It may be related to your own staff or hiring ones employed by a service provider, from another country, to perform specific tasks. ODC is like a back office, akin to direct recruiting.
A decade back offshoring was usually used to reduce taxes and decrease maintenance costs. However, now tech companies are applying this method to find highly qualified talents abroad. Such an approach is not due to reducing costs, but rather to the lack of qualified human resources in their country.
According to the research, the American job market is in need of qualified tech specialists. Only the US is lacking around 250,000 software professionals. At the same time, there are only 62,000 computer science students graduate who can apply for the job. These numbers create an enormous gap in hiring software engineers, despite the fact that tech giants are paying above-market salaries. In such a case the offshore development center comes handy. With the recent situation in the world, many companies move their activities to various distant locations to fill the talent gap. Offshoring and outsourcing models are widely used models by plenty of world-famous firms. Depending on the chosen model the company can set up a new office or build a new team abroad.
Let’s see how the outsourcing model differs.
Outsourcing is when business processes are handed over to another company. Outsourcing doesn’t necessarily mean low cost, it often takes place when a client company needs some external expertise.
Software Development Outsourcing. One of the most significant advantages of outsourcing is that you may stop paying salaries as the project is over. The team may be temporarily, and you don’t have to worry about the office space for them. However, if you got used to having control over your project outsourcing model may not be right for your business. Usually, when you outsource professionals from other countries or even continents, the level of control decreases significantly. In addition, the outsourcing companies usually work with several clients at a time, such an approach may negatively affect some aspects, as you simply may not get enough attention to your needs.
The differences between ODC and outsource approaches are presented in the below table.
|Provides access for hiring the talented developers||Used for certain expertise outside the company|
|Offshoring is used primarily to get foreign tech talents||Outsource can be done within one country (alternatively abroad as well)|
|Focuses on building the new team abroad||Used for delegating some tasks to external professionals|
|Is used to keep full control over the product development||A great way to one-time tasks completed without hiring a new person|
|You can control the sensitive data the way you do in-house||Outsource company may have a weak system that can lead to a leak of intellectual property|
In general, both methods are used widely, but outsourcing is a simpler approach and is usually chosen for the occasional projects. The offshore development center is more complex, where you get a full team in another country but at the same time have full control over them. It all depends on your needs. If you are interested in the Ukrainian team for outsourcing or ODC they are both available for the local market. More about outsourcing and ODC models you may read here.
How to set up an Offshore Development Center
The peculiarity of this method is that you can choose between opening a separate office in another country or forming a new team in the same or another country, or even in several countries at once. This will allow you to configure a balanced and efficient team focused on the desired result. It is also useful because in some countries the salary of developers may be lower than in others due to the knowledge of English. Conversely, in some countries, you will easily find specialists with a high level of language proficiency, but in this case, their salary expectations will be higher. Therefore, with this method, you are free to choose where to invest more resources, based on business needs.
The next step will be opening the actual ODC. You can make it yourself going through the bureaucracy and legislation processes or hand over some tasks to the specially dedicated partner.
If the company decides to go offshoring they may open a new office in another country on their own or contact a vendor to do it for them. In this case, you focus more on your product, while your local vendor takes care of HR payroll & accounting, legal compliance, provides recruitment consultants, office procurements, and equipment maintenance, and everything else.
Why Opening ODC in Ukraine with Vendor is Easier?
To open an offshore development center in Ukraine you may follow two ways. First, visit the country yourself, register your company, learn and understand the local tax system, find recruiters that can find you, proper professionals, and start recruiting process Find location and building, then open actual office. Remember, most of the time you have to stay in the country and work on the organization and shift your focus from the project.
|Opening ODC on your own||Delegate opening ODC to a partner|
|Market Features||Each country has its own specifics (the level of wages, the number of specialists, qualifications)||DNA325 – has more than 5 years of experience in the Eastern European market, we know exactly which country to recommend to our clients.|
|Laws and Taxes||You will have to deal with the laws and taxes yourself.||Our company employs experts who can advise on legal or tax issues, as well as support your company in the future.|
|Recruiting||You will need to hire recruiters||DNA325 is a reputable recruitment firm with over 180,000 Eastern European IT professionals in our developer base. We have great experience hiring the world’s best talent.|
|Terms||This legal and recruiting process can take several months.||Our recruiting professionals know exactly where to look for developers in Eastern Europe. We are ready to show results in a month after signing the contract.|
|Payments||Freelance recruiters fee is 10-15% of the annual salary of the candidate, and the commission of recruitment agencies up to 25%, plus you pay for the services of legal consultants.||You can choose between paying the fixed price based on the candidates’ grades and 15% of the yearly salary.|
Alternatively, there is a second way, the Build-Operate-Transfer model. Basically, you find a vendor or offshore development team in Ukraine, who will do everything for you. All you have to do is to select a reputable professional.
With a properly selected vendor, you, first of all, get off your shoulder’s legislation questions. You don’t have to hire a consultant yourself. Your local partner will handle everything related to laws. But remember you have to choose a partner that is registered in Ukraine as a legal entity. Forget about finding and renting offices, your partner will take this task.
Taxes. One of the biggest headaches while opening the business. Applying for the Build-Operate-Transfer model provides your partner’s finance department services. This means you don’t have to deal with the tax question, everything will be solved.
A brand-building campaign. If your partner is a reputable provider then you save time on promoting your business because the vendor is already a trusted brand.
Get the best talents. Headhunting the right candidate is vital. Developers won’t trust some regular companies, that’s why choose the firm that has a proven track record of getting the top talents.
Moreover, your vendor will provide all the necessary information regarding how to pay to your Ukrainian offshore team, what are the ways to pay salaries, how to do invoices.
To wrap it up, Ukraine is a beneficial direction for small, medium, or large businesses. As you can see the country reach with talents that have a strong skillset. You will be surprised how fast they can learn and how effectively they work. You won’t feel any cultural gap as people are open-minded and eager to learn new things.
Apart from hiring people, Ukraine provides all the possibilities for foreign businesses to feel comfortable, in terms of affordable rent, low taxes, simplified bureaucratic procedures, and many more. Try it, and you won’t regret it as it already attracted many technological giants to the region.
To begin recruiting for your business you have to start by finding the right experts – Talent Acquisition Agency.
DNA325 – is your dedicated professional for the Ukrainian market. The company is located in Ukraine, so they possess deep knowledge of the local market. The talent agency also got access to developers’ databases not only in Ukraine but in other countries of Eastern Europe.
Thanks to online recruitment, DNA325 can form the teams of developers from scratch, and this service spreads across any country in Eastern Europe and LATAM.
Also, if you are interested in a consultation regarding the costs, legislation, or finances in Eastern Europe just contact one of the representatives of the team. Our experts know how to deal with all the peculiarities and take care of the operating management. We will assist in creating the ODC, transform it into a reputable and profitable organization by getting only top talented developers, applying the latest recruitment methods.